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News that Alex Salmond, the leader of the ruling SNP in Scotland, has been somewhat liberal with his recent comments about housing budgets and assistance has caught the attention of opposition...
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Thursday 26th June 2008
Over the last few years we have seen the creation of a number of buy-to-let empires by private individuals who have taken advantage of the increase in house prices and the expanding rental market in the UK. However, with rental income used to fund the growth of many of these empires there are concerns that some investors may see their portfolios collapse like a pack of cards.
Problems at the Bradford and Bingley have shown the difficulty in the buy-to-let market and there are concerns that increased numbers of repossessions may lead to further difficulties for some buy-to-let entrepreneurs. When the market is rising it is very easy to fund the next property purchase using rental income from earlier investments – many of which have been remortgaged to raise capital– but when rental income starts to fall and mortgage costs start to rise it can lead to serious troubles.
Just a couple of years ago a number of buy-to-let experts were predicting that the rise and rise of the market could not continue indefinitely and some investors should be banking profits. However, many thought they had beaten the experts when property prices continued to rise, but who is right now? |
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